Consider two recent meta-analyses that have been conducted to summarize prior research on the topic. b. composed solely of outside directors. a. significant pay reductions for many corporate CEOs c. Competition The CEO's behav-ior may be indication of Institutional Directors: Types. "Several members of the board of directors of American Textile Products (ATP) have proposed creating the position of lead director. And in many cases, this might mean recruiting board members outside of existing networks. Corporate governance revolves around the relationship between which two parties? The market for corporate control may not be as efficient as previously thought as recent findings suggest that those firms targeted for takeover by active corporate raiders are Mr. Abercrombie is considering expanding his consulting practice overseas. These dynamics appear to shape whether diversity on the board actually matters to the boards work. b. likely to gain financially if their employing firm is taken over by another. a. monitoring "The major determinant of CEO pay is(are): Because women directors tend to be significantly . a. setting the option strike price substantially higher than the current stock price. c. pressure the board of directors to reprice their stock options. The market for corporate control serves as a means of governance when d.a variety of compensation plans for execu-tives of foreign subsidiaries. "One means that is considered to improve the effectiveness of outside directors is: The CEO's behavior may be indication of: The CEO genuinely seeks their greater involvement. The team members are becoming concerned about the security of their jobs at Sierra Infusion. d. requiring that outside directors be truly objective by having no ownership interest in the firm. a. equivalent d. incentive. Do companies with women on the board perform better than companies whose boards are all-male? Even if women who are named to corporate boards are different from the men on these boards and even if the women do speak up and influence board decision-making, their influence may not be consistently positive (or consistently negative, for that matter). c. an increased number of IPOs (initial public offerings) are expected. a. some foreign firms have delisted on U.S. stock exchanges. If so, how and when? "Product diversification provides two benefits to managers that do not accrue to shareholders: ____ and ____. b. company unions which are a type of governance system. The average correlation between CEO gender and long-term financial performance is .007. b. The argument is that women differ from men in their knowledge, experiences, and values and thus bring novel information and perspectives to the board. c. opportunity Board diversity matters but concentrating on only one form of diversity isnt enough. Combined, the board members held seats on 47 corporate boards in the U.S. across a variety of industries. Our interviewees suggested that social diversity (e.g., gender, race/ethnicity, and age diversity) and professional diversity are both important for increasing the diversity of perspectives represented on the board. b. insuring that the strike price value of the options can be lowered if the organiza-tional environment becomes more risky. c. used to reduce corporate debt. To establish causal effects, you need to conduct a randomized control trial. a. earnings potential for Corporate Directors' Implicit Theories of the Roles and Duties of Boards Research suggests that firms with ____ perform better, especially when collaboration among top management team members is important: A primary objective of corporate governance is to: Which of the following is a FALSE statement about corporate governance? b. inside 5 We then gave the participants a list of 10 corporate goals and asked them how much they thought the company cared about each of them. Compensation of CEOs in both private and public companies is being tied more closely to observable performance goals. d.likely to be terminated by the acquiring firm even in a friendly takeover. Research suggests that firms with ____ perform better, especially when collaboration among top management team members is important. b. greater managerial autonomy. One interviewee said, The lead director has a role here to make sure that they invite people in and if somebody is really quiet they should go to that personand make sure they feel comfortable saying anything that they want.. "An agency relationship exists when one party delegates: The apartment is hot or the air conditioner is not working , if and only if the temperature is 9090^{\circ}90. Rigorous, academic studies of CEO gender and company performance tell much the same story as rigorous, academic studies of board gender diversity and company performance do. c. executive compensation systems. a. banks c. liable for any illegal actions by the top management team. Many commentators suggest that gender diversity in the corporate boardroom improves company performance because of the different points of view and experience it offers. a. used to diversify the firm. b. enforcement b. d. a poison pill. Collegial boards are more likely to accept and integrate differences of opinion. An immense investigative effort has been devoted to these questions: over 140 studies in the past several decades, conducted in dozens of countries, and published in journals from many different disciplines and theoretical traditions. c. having the stock option plan designed by insiders on the board of directors who are familiar with day-to-day operations of the firm. All of the following are consequences of the Sarbanes-Oxley Act EXCEPT d.over-valued firms. A majority of the directors are concerned that while Mr. Leagreet has been re-sponsible for the firm's earning above-average returns, he has been displaying a tendency to-ward personal extravagance at the firm's expense. I think its also clear to say if youve got the longer-term members that came from the old established approach to the way boards were runthey may just not be quite as supportive in some cases., In boards like these, interviewees said discussing the issues rather that shrinking away from them was of utmost importance. It is worth noting that gender diversity in other kinds of work teams is not significantly positively related to performance, either. d. Large institutional investors such as pension funds, and insurance companies are relatively insignificant owners of corporate stock. d. a silver handshake. As a means of increasing profits, IFS has used substandard ingredients in these meals and has consistently lied about this practice during quality investiga-tions by the Marines. Researchers have also studied the relationship between board diversity and various board decisions and practices such as acquisitions, board monitoring and dividend payouts (Ararat, Aksu, Cetin, 2015; Chen, Crossland and Huang, 2016; Chen, Leung, & Goergen, 2017). b. government auditors. d.defense tactics make the costs of a takeover lower. But our research suggests that shifting the diversity discourse away from gender to other dimensions of expertise and experience might, in fact, help women and other underrepresented groups for example, instead of saying we have appointed a female director the focus should be we have appointed an expert on China. With less emphasis on gender, female appointments might one day no longer be perceived as checking a social performance box, and signal nothing about firm preferences other than its commitment to hiring the best people for the job. b. decreases. German executives are not dedicated to the maximization of shareholder value largely because: Ambrose received: Idea diversity is also important., To offset these concerns, some boards are ensuring that skills and expertise, along with demographics, are front and center in their recruiting processes. b. control Compared to managers, shareholders prefer d. made up of CPAs with auditing experience. Writing recently on Huffington Post, for example, one consultant observed the following: Companies with gender-diverse management teams have been proven to consistently perform better and be more profitable than those without them. b. the addition of outside directors to the board. And even when individuals who are minorities, tokens, or outliers speak up, the majority group members may discount their views. The chapter Opening Case suggests that ___________ is (are) frequently blamed for high CEO pay during periods where corporate performance has been poor. c. the laxity of institutional investors. The board of directors and firm innovation: A meta-analytical review c. crossing the palm with silver. b. CalPERS' interest in Acme Brands will cause the directors to reduce the size of the stock option plan from what it would otherwise have been. b. higher Combined, the board members held seats on 47 corporate boards in the U.S. across a variety of industries. b. decreases. The research found that diversity doesnt guarantee a better performing board and firm; rather, the culture of the board is what can affect how well diverse boards perform their duties and oversee their firms. Consequently, the board has decided on an incentive plan that involves payout based on the firm's performance five years in the future. a. increases shareholder value significantly. That gives you an opening to say, Oh, okay, we need to look for somebody who understands manufacturing abroad. So, as long as we are going to go look for somebody, lets use it as an opportunity to build some diversity.. Still, the relationship between gender diversity and accounting returns was tiny. b. a weak board of directors. Both the Pelzer purchase and the Alvarez sale were in transit at year-end. But research conducted by consulting firms and financial institutions is not as rigorous as peer-reviewed academic research. For example, companies with more than 30 percent . This wouldnt be a problem if diversity initiatives were not seen by many investors as little more than costly experiments. a. usually on the verge of bankruptcy. b. the market for corporate control. Legislation, codes of conduct, and guidelines have been developed to improve corporate governance. b. increased diversification of the firm. Results of numerous academic studies of the topic suggest that the presence of more female board members does not much improve or worsen a firms performance. c. pressure the board of directors to reprice their stock options. a. moving toward having directors from different backgrounds d. outside directors own significant equity in the organization. At a meeting over dinner, the top management team agrees to go to the board of directors with a proposal for In sum, the research results suggest that there is no business case for or against appointing women to corporate boards. a. b. long-term firm performance is more easily manipulated by the board of directors through financial and accounting methods than are shorter-term measures of firm performance. c. related b. institutional shareholders This plan will be very attractive in luring candidates for the CEO position. Despite the intuitive appeal of the argument that gender diversity on the board improves company performance, research suggests otherwise. The CEO of Alta Corp. is dismayed by a lack of effort and insights his directors provide during board meetings. c. remains constant. b. a poison pill. a. the CEO is also the chairperson of the board of directors. c. crossing the palm with silver. a. boards of directors. "There is some evidence that performance bonuses for executives based on annual results are ____ investments in R&D where the firm was highly diversified. c. the manager's supervisory needs are lowered, the manager is allowed greater time to oversee a wider range of activities Other things being equal, market analysts may, consciously or unconsciously, regard all-male boards as more competent than boards that are more gender-diverse. The average correlation is .15. b. large institutional investors control large blocks of stock. a. The decisions made by top-level managers are typically complex and nonroutine. d.always outperforming their industry. d. penalties for inadequate firm performance. The benefits of having a socially and professionally diverse board cannot be realized without an egalitarian board culture. But are investors walking the walk on board diversity? Boards that want to maximize their effectiveness need to do more to ensure that different perspectives are regularly elicited and integrated into the boards work. b. typically under-performing their industry. It is also important to consider recruiting from outside of the CEO and CFO pool to increase board diversity. a. Write the statements in symbolic form . This may lead to all EXCEPT: But firms expecting a financial performance boost simply by increasing female board representation may end up disappointed. a. defense tactics are usually beneficial for the executives of the target firm. a. firms with unethical top executives Board Diversity, Firm Risk, and Corporate Policies Measuring Board of Director Performance: An Overview and - Emerald Amos Ball, Inc., is a printing company in Iowa that has been family owned and managed for three generations. b. stock brokerage companies. The fact that two quite distinctive meta-analyses reached nearly identical conclusions carries a lot of weight. c. large; small d. a system of cross-shareholding among firms. c. the corporation has greatly exceeded performance expectations. a. the number of stockholders and the parties they represent. b. d. reduction in R&D expenditure. c. safer strategies with more focused diversifica-tion for the firm. New Report: Companies With Diverse Boards Out Performed Their Peers a. negatively related to: c. executive compensation systems. a. shareholders in the large institutional firms listed on the New York Stock Exchange. Hed speak like, without taking any breaths for two hours on end., But even in hierarchical cultures, the CEO, Chairman, or lead director can help to create a more open communication environment. What circumstances would most likely have initiated this proposal? d.re-invested in additional corporate assets. "The use of excessively-generous stock options for executive compensation has been slowed in the past couple years for all of the following reasons EXCEPT: "Archibald Smith has moved from an upper-middle management job at Chromatic Array, Inc., to a similar position with Pixilair Corporation. If these dynamics occur within corporate boards, boards may not take full advantage of their own cognitive variety. What would you recommend? Governance is used to establish order between parties whose interests may be in conflict. d.outsidedirectors ownsignificantequityintheorganization. In Japan, the principal source of the active monitoring of large companies comes from What amount should Stallman report as its December 31 inventory? b. Research has found little to no evidence supporting the idea that companies with female board directors perform better than companies run by all-male boards. Which of the following statements is FALSE? a. increased diversification of Sierra Infusion. a. risk that managers will behave opportunistically. In a recent study, we examine board composition and financial data on 1,644 public companies in the U.S. between 1998 and 2011, controlling for numerous firm-specific characteristics like size and corporate governance structure. a. 106. This plan will be very attractive in luring candidates for the CEO position. a. d.reflected in the price of the stock. b. the market for corporate control. At the board of directors level, more ethnically and cultural diverse companies were 43% more likely to see. How to build a better, more just workplace. b. Japanese firms will have little interest in Mr. Abercrombie's specialty because these skills are already practiced at a high level. "All of the following statements are TRUE about the use of defense tactics by the target firm during a hostile takeover EXCEPT: b. increased diversification of the firm. c. requiring outside directors to own significant equity stakes in the firm. Nor do they perform worse.. a. ownership concentration. b. enforcement One board member shared: We look at diversity in a lot of different ways experience, age, ethnicity, gender, etc.. b. "Usually, large block shareholders are considered to be those shareholders with at least ____ percent of the firm's stock. Which of the following statements is most likely to be TRUE? Simon Leagreet, the Chairperson and CEO of L-EVA Industries, Inc., has long been the major power at L-EVA. "In Japan, the principal source of the active monitoring of large companies comes from: Complete the following: In small firms, managers often own a ____ percentage of the firm, which means there is ____ separation between ownership and managerial control. d. frozen assets, Product diversification provides two benefits to managers that do not accrue to shareholders: ____ and ____. Historically, ____ have been at the center of the German corporate governance structure. a. available to comment to external analysts. b. Which of the following statements is most likely to be TRUE? (2020) finds that firms with older boards perform better than those with younger boards in terms of ROA. a. generate free cash flows, reduce the risk of total firm failure d. The firing by President Obama of the CEO of General Motors because the board had failed to act in previous years. a. a golden parachute. Board gender diversity thus explains about 1% of the variance in companies engagement in CSR. The women named to corporate boards may not in fact differ very much in their values, experiences, and knowledge from the men.. Research suggests that boards of directors perform betterif a. the CEO is also the chairperson of the board ofdirectors. Increases in board diversity may signal to investors that the firm is motivated by social goals and cares less about maximizing shareholder value. a. making CEOs more accountable for their performance. Researchers interviewed 19 board directors (15 women and four men) to learn whether and how corporate boards were benefiting from diversity. A major conflict of interest between top executives and owners, is that top executives wish to diversify the firm in order to ____, while owners wish to diversify the firm to ____. For example, our interviewees on the boards of hi-tech start-ups and cyber security firms revealed that women, minorities, and younger board members often hold these coveted roles on boards in their firms and industries. a. the firm's free cash flow. "Executive compensation is a governance mechanism that seeks to align managers' and owners' interests through all of the following EXCEPT: "The separation between firm ownership and management creates a(n) ____ relationship. Besides the name of the director, the press releases were identical. This is because women bring new insights and perspectives and increase the cognitive diversity of the board. The CEO would pick up the phone frequently and connect us., Whoever is leading the board also has the responsibility of ensuring that quieter board members speak up in board meetings. d. All of these choices would increase involvement. a. a. increased diversification of Sierra Infusion. d.potential tax burden for. Yet, the answers have not been clear or consistent. d. dependent. Hostile takeover attempts are so common that they do not reflect negatively on the firm's performance. What other expenses might it expect? Mary-Hunter (Mae) McDonnell is an assistant professor of management at the Wharton School of the University of Pennsylvania where she conducts research on the topics of non-market strategy and corporate governance. c. elevation of foreign executive compensation to U.S. levels. b. company unions, which are a type of governance system. There are small but dependably positive associations of female representation in CEO positions and TMTs with long-term value creation for a firms fiscal outcomes. a. lead independent The slow progress on gender diversity has frustrated policymakers, industry groups, and institutional investors, many of whom have publicly advocated for inclusion of women and minorities among the top ranks of management. d.banks. Which of the following statements is about corporate governance in Germany is FALSE?

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